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Sunday, June 20, 2021
Stocks & Shares

Stock market Asia higher amid vaccine, U.S. stimulus hopes

CSI 300 index

CSI 300 index gained 0.15%, Hang Seng index jumped 0.86%, KOSPI added 0.4%, and Nikkei rose 0.2%

Stock market Asia were buoyant on Wednesday and the dollar eased as hopes of effective coronavirus vaccines and the growing prospect of more U.S. fiscal stimulus cheered investors ahead of the Christmas holiday season.

MSCI’s broadest index of Asia Pacific shares outside of Japan rose 0.8% after two straight days of losses.

The index, hovering near record highs, is up 3.8% so far in December and is on track for its best yearly performance since 2017 thanks to generous government and central bank stimulus around the world.

Australian shares rose 0.8% while South Korea’s KOSPI was up 0.4% and Japan’s Nikkei added 0.2%.

China’s blue-chip CSI 300 index added 0.15% and Hong Kong’s Hang Seng index climbed 0.86%.

We expect many emerging market economies to continue to show positive momentum in 2021 led by Asia, TD Securities wrote in a note, adding that, on aggregate, they would recover lost output from 2020. China is likely to see a more rapid convergence to pre-COVID GDP levels.

E-mini futures for the S&P 500 were off 0.05%.

Overnight, U.S. and European stocks, gold and oil were upbeat. The Dow rose 1.1% while the S&P 500 and the Nasdaq climbed 1.3% each.

In a sign the positive momentum was set to extend, Eurostoxx 50 futures and Germany’s Dax futures edged 0.1% higher, while futures for London’s FTSE firmed 0.3%.

Despite COVID still raging in Europe and the United States, markets are looking through the near-term risks to economic growth and focusing on the likely better times in 2021, Betashares chief economist David Bassanese wrote in a note.

Central banks are promising to keep rates low for 1 to 2 years, which is supporting the economy and financial markets and also provides a ramp for equity price, he added.

Optimism for a trade deal on Brexit also boosted stocks, while contributing to a weaker dollar against the British pound and the euro.

The dollar made a fresh 1-1/2 month low of 103.40 against the Japanese yen as progress toward a spending bill and COVID-19 relief measures sapped demand for safe assets. It is down 4.7% this year so far.

Against the euro, the greenback languished near 2 1/2-year lows and was last at $1.2160 after two straight days of losses while it was flat at $1.3459 on sterling.

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